In the US, the law demands that employers who have fifty or more workers who are employed on a full-time contract should offer health insurance coverage for them. The employer is obligated to pay the premiums of health insurance policy for the employee. The employer can stop providing the health insurance coverage for the employee if the employee is fired or cannot work the minimum number of hours he or she was contracted to work.
Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance covers an employee who is eligible for the insurance and his or her dependents in case the employee is fired or the working hours are reduced if the employee accepts to take on the responsibility of paying the premiums.
Disability insurance and life insurance are excluded in COBRA insurance, but it pays for prescription drugs, vision care, and dental treatments. Under COBRA you can access large supplies of drugs at a discount, use generic drugs and get services from retail clinics and low-cost community clinics.
COBRA offers health insurance coverage at group rates hence it is cheaper than an individual health insurance plan. Tax deductions and refundable tax credit that is named Health Coverage Tax Credit (HCTC) that is in COBRA helps the employees to you save money.
The benefits of COBRA insurance last for eighteen months, but the employee can request for an extension. The employee has to pay the full cost of the insurance and an administrative premium. You can use money from your Health Savings Account (HSA) to pay for premiums of COBRA to reduce the costs of the insurance.
Employees would qualify for COBRA coverage if the job loss was voluntary or involuntary except when the employee was involved in gross misconduct. The decrease working hours that may cause the employee to lose employer insurance coverage also qualifies the person for COBRA.
The dependents of the COBRA insurance will no longer be covered in the case of death of the covered employee, legal divorce or separation with the spouse occurs, the child turns 26 years hence he or she is above the age of being covered by the parents’ insurance or when the employee qualifies for Medicare insurance. If the employee is in the low-income category, COBRA allows beneficiaries of the employee to get benefits of other state or local programs like Medicaid.
The covered employee can be stopped from benefiting from COBRA if the person delays paying the premiums, stops maintaining a group health plan, is a beneficiary of another group health plan such as with a new employer, engages in misconduct or qualifies for medical benefits.